More on why immigration can be economic stimulus
Wall Street Journal columnist L. Gordon Crovitz agrees that immigration is an economic issue, a point I made in Sunday’s column. He recites various statistics to back up his point:
Half of Silicon Valley start-ups were founded by immigrants, up from 25% a decade ago. Some 40% of patents in the U.S. are awarded to immigrants. A recent study by the Kauffman Foundation found that immigrants are 50% likelier to start businesses than natives. Immigrant-founded technology firms employ 450,000 workers in the U.S. And according to the National Venture Capital Association, immigrants have started one quarter of all U.S. venture-backed firms.
And he argues that there’s no time like the present to let in more legal immigrants:
Still, an economic downturn is the right time to move on immigration, one of the few policy tools that could clearly boost growth.
In a new NBER working paper, Jennifer Hunt of McGill University offers more evidence on why immigrants are good for the economy. She writes:
Immigrants who originally entered the United States on temporary work visas or on student/trainee visas outperform native college graduates in wages, patenting, commercializing and licensing patents and authoring books or papers for publication or presentation at major conferences. I also find that, conditional on education, these immigrants are more likely than natives to start a successful company. …
Too often, we attract bright students to our universities, only to send them packing after they graduate. That certainly doesn’t make economic sense.
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
It certainly DOES make economic sense to educate foreigners here, allow them to work for a while to gain practical skills, and then have them leave. Reason 1: They usually bring money into the country to pay for their education, which is good. Reason 2: When they return to their native country (which is generally a developing country) they benefit it by bringing back skills that are otherwise lacking, and that is good. Reason 3: If they stay in the U.S., they add to population growth here, thereby adding to the population of the nation that places by far the greatest strain on limited resources, and that is bad for other Americans who are competing for the same limited resources, and bad for the world overall.
I prefer the Economist magazine to the Wall Street Journal because it has a much better grasp of the issues like this where there is a conflict between short-term economic benefits, and long-term economic and environmental consequences.
BTW, McGill University is in Canada, and many Canadians are probably happy to encourage immigration to the U.S. to divert it from there.
Ted–The idea that population growth is such a bad thing in the US is not really true. We need population growth among working class-aged individuals–it’s one the best ways to help out with our growing Medicare and Social Security costs. The graying of our society places a severe strain on our services and on our workforce, and it is one of the most significant causes of tax increases levied over the past century or so. Combined, we and our employers are paying over 15% of our wages (up to nearly $110,000) just to pay for what amounts to longevity insurance in the form of Social Security and Medicare.
I’ve never read an Economist piece that suggested that it is in the interest of our country to send foreigners home once we educate them and they get some work experience. The Economist supports a profound loosening of immigration laws related to individuals with skills like education. They comment that the education can improve their home countries, but they would never suggest it is in the interest of the US for someone to come to Stanford, get a Ph.D. in engineering, work here for a few years, and then go home.
Canadians are generally very pro-immigration.
1950’s
Population Growth = 11,516,000
Employment Growth = 7,215,000 (62.65%)
1960’s
Population Growth = 19,449,000
Employment Growth = 13,862,000 (71.27%)
1970’s
Population Growth = 30,811,000 (Depression in Mexico)
Eloyment Growth = 21,224,000 (68.88%)
1980’s
Population Growth = 20,865,000
Employment Growth = 17,685,000 (84.76%)
1990’s
Population Growth = 21,667,000
Employment Growth = 16,998,000 (78.45%)
2000’s (Mar. 2009)
Population Growth = 26,254,000
Employment Growth = 5,137,000 (19.57%)
Avg for previous 1950′- 1990’s = (73.20%)
Avg. employment growth for 2000’s should/would have been: = 19,218,994
Employment Shortfall 2000-2009 (March) = 14,081,994
Source Data:
BLS CPS Downloaded on 4/20/2009
http://www.bls.gov/data/
Formula: Each decade represents EOY Dec XXX9 to EOY Dec XXX9
Example: Decade of 1950’s = Dec 1949 to Dec. 1959.
Series Id: LNU00000000
Not Seasonally Adjusted
Series title: (Unadj) Population Level
Labor force status: Civilian noninstitutional population
Age: 16 years and over
Series Id: LNU02000000
Not Seasonally Adjusted
Series title: (Unadj) Employment Level
Labor force status: Employed
Age: 16 years and over
Our nation was built and made strong by immigrants. I’m all for the immigrants. I think we need immigration reform now.
So, for you people who think that immigration and its attendant population groeth are such a great thing, how many more people do you think that the St. Louis area needs? Would you like to see a continuous city from Milwaukee to Chicago to Springfield IL to St. Louis to Columbia to Kansas City? When is enough population growth enough? And if you aren’t willing to take steps now to slow it down, how far will our material and environmental standard of living have to fall before you are willing to take effective action?
And for those racist European-Americans who think that “our nation was built and made strong (whatever that means) by immigrants,” ask any of the remaining ancestors of the original inhabitants what immigration did for their quality of life (not to mention their very survival).